Dunkin’ sued over bias
By Mark DeCambre
Some Dunkin’ store owners say they got stuck with the dregs.
A suit filed by a group of former franchisees claims the coffee and doughnut chain routinely discriminates against minority owners, particularly African-Americans, by pushing them to buy in poor, less profitable areas.
The complaint, filed today in New Jersey state court, accuses Dunkin’ Brands of giving white franchise developers prime pastry locations, while minorities are left with “economically disadvantaged or marginal areas.”
Dunkin’ Brands, based in Canton, Mass., operates nearly 7,000 franchises throughout the country, with roughly 50 owned by African-Americans. Of those, the majority are located in “economically less advantageous areas,” according to the suit.
The suit says Dunkin’ doesn’t have any African-American owners in Connecticut, New Jersey and Rhode Island — traditional strongholds for the Northeastern chain.
The complaint also claims that Dunkin’ prevents minority owners from expanding with additional stores, making it tougher for them to cut costs and become profitable.
The suit comes as Dunkin’ continues to struggle with a reputation as one of the country’s most litigious franchise groups. In the past, store owners have accused the chain of pursuing them for minor infractions in a bid to collect hefty fines and penalties.
Former franchise owners Reggie and Amy Pretto allege in the suit that the chain “steered” the couple, who at the time lived in Croton-on-Hudson, NY, to “undesirable” locations in Baltimore and Washington after making “false representations regarding the unavailability” of better locations.
The Prettos shelled out $750,000 and sold their New York home in 2004, which they had bought in 2001, to finance their franchisee dreams.
The couple says Dunkin’ officials intentionally misled them with overly rosy projections about weekly sales at their Maryland locations. After their stores struggled, the couple were eventually forced to file for bankruptcy in 2007, according to the suit.
Reggie Pretto, a Dunkin’ employee before he became a franchisee, said he believes he walked into the business with eyes wide open but was still stunned by the actions of Dunkin’.
“They can be very brutal,” he told The Post.
An earlier suit filed by Priti Shetty, an Indian woman, claimed that Dunkin’ officials told her she was not “servile enough” and rejected her as a stand-alone owner.
Both plaintiffs are represented by Marks & Klein, which won a $206 million settlement — one the largest franchisor settlements ever — against sandwich shop Quiznos after store owners sued it for racial discrimination.